Charity commisioners: a suitable case for retirement

Charitable status

BRITISH government is littered with Raiders of the Lost Ark-style boxes. Marked "open at your peril" they lay around Whitehall tempting political Prometheans. Lady Thatcher tried to prise open a couple of them - those marked "Paying for Health Care" and "Property Taxes for Local Government" - and out flew all sorts of nasties. Now our one-year-in-office prime minister seems intent on opening another, that oddly-shaped receptacle bearing the legend: "Why are homes for stray dogs and sick cats classified as charities?"

With the approval (presumably) of the Home Office and Number Ten, the Charity Commission has just launched a huge exercise in redefining charitable purposes. It is taking "a long hard look at the Register of Charities to consider whether those organisations that currently benefit from charitable status should continue to do so. "Write to us," they are saying to the public. "Tell us what you think the modern ethos of charity should be."

There is no question the investigation is long overdue. Here we are, on the eve of the millennium in a post-Christian society, and a Tudor statute and the dictum of a late Victorian judge are still being quoted as definitive guides to what does and what does not qualify as a charity. Neither, incidentally, says anything about cats and dogs, let alone donkeys or marmosets: animals have just crept into their now leading place as the objects of charitable giving.

And that is the problem. To tidy up charity law and administration means confronting profound ideas about what is good, who is deserving, and who merits the top places in the roll-call for our necessarily limited amounts of compassion, let alone free cash. In a pluralist society there are few consensual definitions of "the good", above a small number of platitudes about life and liberty. At a certain level of generality, education may be deemed to be a good thing, but does it follow that Eton College with its top hats and tails, charging pounds 15,000 a year, should qualify as a charity, let alone the Institute of Economic Affairs or the Social Affairs Unit which - stimulating as their arguments and thoughts may be - are decidedly in the business of persuasion and influence (inside the Palace of Westminster as well as out.

Personally, I have never seen much of a case for the Royal National Lifeboat Institution. Even the most curmudgeonly libertarian opponent of state action concedes the need for governments to police the continental shelf, which surely includes rescuing drowning mariners. Many would disagree - they show they do by making the RNLI one of the fattest charities in the register, along with Guide Dogs for the Blind, which has more devoted canines than partially-sighted clients.

The difficulty is that "charity" meaning tax privileges (currently worth around pounds 2bn a year) requires the government more or less to say, "this activity is good; this activity is not good." The Charity Commission has a large staff of lawyers whose job it is to sort out the legally approved sheep from the goats - relying on the most arcane and anachronistic of definitions. So, politics is not good - which seems a queer state of affairs in a democracy. But researching into obscure medical conditions afflicting a tiny fraction of the population is deemed to be worth supporting (in terms of taxes foregone), when at the same time the NHS is desperately trying to cut its drugs bill and downsize public expectations that it can, and should, provide a cure for everything.

The Charity Commission is a rather timid outfit in which the natural caution of Home Office civil servants has helped further narrow the tunnel vision of lawyers who are forever citing the famed 1891 judgement in Pemsel's Case, which said charity came exclusively under four headings - to do with education, the relief of poverty, the promotion of religion and a catch-all definition to do with community benefit. (Of course, categories such as "religion" are nowadays hugely problematic - commentators have a field day asking sarcastically why the English association of white witches is less deserving of charitable status than the Church of England.)

The Charity Commission denies that it wants anything radical to happen as a result of its review of the register. All it wants is more flexibility of definition so that it can, for example, give more reasonable treatment, say, to organisations that help the unemployed. At present, they are often excluded because the law says that if someone gets a "private benefit" from charity, it should not count. But why do such organisations need to be charities anyway - unless they are hoping for a tax handout which, if public policy were above board, ought to take the form of a grant from government that could be openly discussed and monitored.

Tony Blair - prophet of the "third way" - has opened the box labelled "Intermediate Bodies", those neither part of government nor the market. He may regret it, if he gets deluged, say, by Masters of Foxhounds demanding to know why their sport is not charitable . After all, they will say, it confers all sorts of community benefits in addition to the private enjoyment of the hunters.

But the Prime Minister should persevere. Charity is a wonderful thing - meaning the act of giving, privately, without fuss and without fiscal advantage. The parable of the Good Samaritan is one of the most beautiful passages in the Gospels. Unsolicited and unrecognised generosity is a fundament in most world religions. Why not, then, abolish government supervision of charity altogether? If people want to give out of their post-tax income, fine. If organisations want to set up to do their thing and invite public support, let them incorporate as not-for-profit entities under company law and let the Office of Fair Trading supervise their pitches to the public.

If government thinks one activity is better than another, let it say so clearly and transparently and give tax-exempt grants. It already has a template of sorts in the National Lottery scheme - a set of openly-declared objects which the proceeds of that gamble are meant to support. The public seems broadly to support the idea that there is a group of important but peripheral activities - art, sport, do-gooding - that National Lottery money should back. Let the government augment the flow up front - rather than through the back door of tax relief. Why should people need to be bribed to "do good" anyway?